March 2001
The Parent Trap
by Chris Schlegel
Growing up with mum and dad can be a nuisance. Evidence on crime suggests that growing up without them is much worse.
Criminal activity has very few supporters. Economists hate it because it’s such an inefficient transfer system; those getting punched would prefer not to, and most of those doing the punching would trade it in for less risky returns if the right labour market opportunity came along. All counted, lying, cheating, and stealing is a negative sum game for which the full opportunity cost in the United States may be near one fifth of all goods and services produced in any given year. This puts Crime Freedom Day on March 18th in that country, given the estimated total opportunity cost of criminal activity is US$1.7 trillion. The holiday comes earlier (February 18th) when transfers are excluded, though the fact that someone else is enjoying your former assets is consolation more for the utilitarian policy maker than for you.
Both dates come well before Tax Freedom Day, but with crime, all you’re getting back is minus one wallet plus an expected beating, not a highway or a park bench. Unless, of course, you’re the one doing the stealing, in which case you’ve inflicted almost $2 in net social cost for every dollar of stolen assets. This game is only slightly less wasteful in Canada, where the estimates (Brantingham and Easton, 1996) would have you working until January 20th before the social cost of crime is paid off.
Where is all this crime coming from? What can be done, and what has actually been tried, to lower the social costs stemming from crime’s externalities? Of the usual suspects included in earlier studies, such as unemployment rates, number of police officers, length of prison terms, and conviction probabilities, none seem to have as much impact on their own as variables relating directly to family structure.
Provocative new research points to single-parent families as a source of crime. In a recent study, the Heritage Foundation’s Robert Rector finds evidence that family history plays a generous part in the odds you are likely to face when making career choices. In the US, males born outside of wedlock have twice as much chance of committing a crime, being convicted, and serving jail terms. While the majority of the prison population is male, daughters of single parent families don’t get much of a break either: they face twice the probability of starting a single-parent family of their own, thus repeating the cycle of choices their parents made.
Working with US data at the county level, I find support for the hypothesis that kids without fathers (not just single-parented) are more likely to commit crimes than children from intact families. After accounting for the effect of unemployment rates, per capita personal incomes, and the population density at the county level, a 10 percent increase in the number of female-headed households would be expected to increase the number of serious crimes reported in the US by about 5 percent. The crime-inducing effect of a 10 percent increase in the number of female-headed households does fluctuate considerably across states—from a 10 percent or greater increase in New York down to 3 percent in California—but is always highly significant.
In a more involved analysis, Glaeser and Sacerdote, 1999, find that while, on average, variables such as higher expected gains from theft and lower deterrence in cities are significant predictors of crime, they explain at most about two-fifths of the difference between crime levels in cities and rural areas. The larger number of female-headed households in cities, however, is found to be highly significant and explains as much as half the crime difference.
Further supporting the hypothesis that family ties matter, Levitt and Donohue find that the 1973 Roe v. Wade decision to legalize abortion across the US reduced the crime rate across all categories 18 years later, by as much as 25 percent in some states. Nearly half the reduction in crime rates since the early ’90s is causally related to the 1973 decision.
This is a prickly subject, and rather open to suspect policy implications. In the most important lottery of life—the one bestowing starting values—small differences appear to make a big difference. A poor answer to this, however, is to tinker with the starting values! Granting aid to single mothers ex post may seem like charity; making public the promise that welfare will be paid is likely to enter incentives before conception and is certain to promote dependence thereafter. The average time spent on support under the Aid to Families with Dependent Children program is now 13 years, and this has hurt children’s ability to perform well at school (Rector, 1996). Because almost nine out of ten single mothers cannot read, their children’s difficulties at school are unlikely to get much attention at home. This leaves plenty of room for bad policy.
A good policy, if the above empirical findings are correct, is a policy that strengthens the conventional family while leaving private work incentives intact. As is regularly the case, the recipients of income-support will be quite upset by reform because they will no longer receive money for having children. The social cost of crime would suggest that upsetting the track record of these interest groups is worth it.
Sources
Anderson, D. (1999). "The Aggregate Burden of Crime." The Journal of Law and Economics, vol. 42(2) (October): 611-642.
Brantingham, Paul and Stephen Easton (1996). The Cost of Crime: Who Pays and How Much? Critical Issues Bulletin, Vancouver: The Fraser Institute.
The Economic Analysis Committee, National Crime Prevention Council of Canada (1996). "Money Well Spent: Investing in Preventing Crime." (Sept.) Internet: www.crime-prevention.org/english/publications/economic/invest/cost_e.html.
Glaeser, E. and B. Sacerdote. (1999). "Why is there More Crime in Cities?" Journal of Political Economy. Vol. 107 (6:2) (December), pp. 225-258.
Levitt, S., and J. Donohue. (forthcoming). Quarterly Journal of Economics.
Rector R. (1996). "Welfare Reform on the Sidelines." Washington Times. May 31.
Chris Schlegel is a research economist at The Fraser Institute. He is currently completing his M.A. in Economics at Simon Fraser University.
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